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Analysis: Tesla may build safe electric cars; when will they be affordable?

Now that Tesla Motors has turned a profit, and its Model S electric car has scored the top federal safety rating and the top Consumer Reports rating, what’s left for the upstart Palo Alto automaker?

Plenty.

What Tesla has accomplished is remarkable, and it appears on track to become the first successful automotive start-up in a century. Investors certainly think so, having pushed the stock up 323% this year.

But whether the bullish bet pays off in the long term will depend on whether Tesla can break out of its niche of selling government-supported cars to rich people. Despite the =start, some huge obstacles remain in Tesla’s path.

Remember that much of Tesla’s profits rely on government policy. Without pollution regulations that the automaker has effectively turned into an ATM, it would be far from profiting on what remains a small-volume, expensive car. The Model S may be the darling of the Los Angeles luxury market, but it’s way off the shopping list of almost every U.S. driver.
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